GOLD Price Analysis – May 10, 2023

Daily Price Outlook

Yesterday, gold prices saw gains and tested the 2030.00 level, creating optimism that the current bullish trend will persist. The prices are organized within the bullish channels that are visible on the chart and are expected to test 2048.70 as their first target, with a break leading to a move towards 2075.25 as their next major goal.

Gold is currently trading in a narrow range ahead of the release of US inflation data. Investors are waiting for this important data as it could potentially affect the Federal Reserve's approach.

At 12:30 GMT, the US consumer price index (CPI) data will be released. Reuters' survey of economists expects that the mid-point consumer prices will rise 5.5% from last April. Hareesh V, the research head at Geojit Financial Services, suggests that if US inflation remains under control, it could result in a break in Fed rate hikes, which would reduce the dollar and boost gold.

The markets indicate an 83% chance that the US central bank will hold rates at their current level in June.

Fed Governor Philip Jefferson stated on Tuesday that the American economy is hiring in an "orderly fashion," while New York Fed President John Williams said it is too early to decide if the Federal Reserve will continue to raise interest rates.

Although gold is considered an inflation hedge, rising interest rates decrease the demand for non-yielding bullion.

Hareesh suggests that the bleak outlook for the US dollar and yields has restored gold's status as a safe haven. Hareesh also believes that concerns over the global economy's state and the forecast for demand and supply could potentially assist the commodity in the near future.

Indian gold prices are influenced by factors such as worldwide demand, currency, interest rates, and governmental policies and are available from reputable jewelers. The purity of gold is measured in carats. Pure gold, also known as 24K gold, has a purity of 99.9%. On the other hand, 22K gold is composed of 22 parts gold and two parts other metals, such as copper and zinc.

GOLD – Technical Outlook

On Wednesday, the precious metal gold traded at the $2,030 level, having failed to surpass the $2,037 resistance level. Presently, a glance at the technical side of the market reveals that gold has dipped below the 50-day exponential moving average, which was providing significant support around the $2,034 level. Concurrently, the RSI and MACD indicators remain in a buying zone.

There also appears to be an upward trend line likely to support gold prices around the $2,020 level. Hence, if gold continues its upward trajectory and closes above the $2,020 level, investors may have an opportunity to consider a buy position above this level. A break below the $2,020 level could potentially drive the gold price towards the next support level at $2,010 or the psychological mark of $2,000.

On the other hand, if bullish buying dominates the market, then gold has the potential to break above the $2,035 resistance level. On the upside, it could potentially target the subsequent resistance levels of $2,050 and $2,057.